Trade agreement could boost Costa Rican fruit exports to South Korea

Gains from a free trade agreement with Korea would go way beyond increased trade with the country, Costa Rica’s foreign trade minister said.

Alexander Mora, who was in Seoul last week for the Korea-Latin America Business Summit, said his country could learn a “great deal” and benefit from spillovers through foreign direct investment and bilateral cooperation.

“Some preliminary estimates we have developed using a computable general equilibrium model reveal that Costa Rican exports of fruit, medical devices, vegetables, pork meat, beef, plants, flowers and electronic products may register the largest increases," Mora said.

Korea struck the trade deal with six Central American countries last November after 17 months of negotiations. The six countries are Costa Rica, El Salvador, Guatemala, Nicaragua, Panama and Honduras. Korea is the first Asian country to sign an FTA with all six Central American countries.

Following the deal, tariffs will be scrapped on over 95 percent of goods. Korea promised to scrap the tariffs on the major export items of the Central American countries, such as coffee, sugar, bananas, pineapples and mangos. Korea, meanwhile, will benefit in automobiles and home electronics. The deal also opened up doors for Korean companies to advance into the region’s government procurement market, including energy, infrastructure and construction.